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5/21/2012
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Google Must Make 4 Antitrust Fixes

European Commission demands proposals to address its anti-trust concerns, which include results placement and copying content from other search engines without permission.

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Joaquin Almunia, VP of the European Commission responsible for Competition Policy, on Monday offered Google a way to resolve the Commission's concerns about alleged anti-competitive business practices.

The European Commission began investigating complaints arising from the way Google handles its search business in November 2010. Now it wants Google to propose a self-regulation regime to settle the inquiry.

"Our investigation has led us to identify four concerns where Google business practices may be considered as abuses of dominance," said Almunia in a statement.

Google doesn't accept that Commission's conclusion that its business practices are unfair to competitors. "We've only just started to look through the Commission's arguments," a Google spoksperson said via email. "We disagree with the conclusions but we're happy to discuss any concerns they might have."

[ Read Google Apps: Has Adoption Slowed? ]

Google insists competition on the Web has increased since the investigation began and that Google in particular faces "tremendous" competitive pressures.

Thomas Vinje, EU counsel for FairSearch, a group backed by Microsoft and various online travel companies, said in a statement it expects any remedies "will include enforceable conditions that bring an effective end to Google's unfair and abusive business practices, and that promote meaningful competitive alternatives for consumers."

Regardless of how the Commission's concerns are spun, Google now has "a matter of weeks" to propose how it will address the Commission's four concerns.

1) Unequal treatment of third-party vertical search links. Vertical search links are links from specialized search engines that focus on particular kinds of queries, such as travel search. The Commission worries that Google treats its own vertical search links differently than those of competitors. A possible example: Typing the search "San Francisco to New York" returns an elaborate layout from Google Flights above a less graphically compelling series of search results from travel sites FareCompare, Kayak, and others. Google identifies its Google Flights result as "Sponsored," though it does not have the same graphic presentation as third-party sponsored search results.

2) Copying content from vertical search engines.The Commission says Google might be copying content such as restaurant reviews from third-party websites and using that content without authorization. When Google did this in the past, Yelp objected. Then last year Google bought Zagat to obtain its own online review content. If Google is still indexing third-party content and displaying that content for its own benefit, that's not presently obvious. For example, consider searching for the restaurant Foreign Cinema in San Francisco. If you search for "Foreign Cinema reviews," the first search result link leads to Yelp.com. However, Google adds a link labelled "Google reviews" to the search result associated with the Foreign Cinema website. Some competitors could argue this is unfair. If you just search for the restaurant name, Google's reviews come up associated with the restaurant search result link.

3) Search agreements with partners. The Commission believes that Google's AdSense program, which allows websites to make money by serving ads from Google's ad network, unfairly shuts out competing ad networks with an exclusivity requirement. Google's AdSense terms of service agreement says publishers cannot display advertisements that might be confused with Google ads, cannot use another site search service, and cannot display "any non-Google content-targeted advertisement(s)." Thus, Google does not completely ban competing ads on AdSense websites, but does require that competing ads are less relevant because they're not related to website content.

4) AdWords API restrictions. The Commission says it's concerned that "Google imposes contractual restrictions on software developers which prevent them from offering tools that allow the seamless transfer of search advertising campaigns across AdWords and other platforms for search advertising." The Commission is referring to the AdWords API Terms & Conditions, which Google critics have objected to for at least the past four years.

The AdWords API rules disallow automated copying of Google ad campaign data to non-Google ad services: "If you run your own advertising network and the AdWords API Client offers functionality that copies data between Google and your advertising network, then you must ensure that end-users must manually select AdWords campaigns or campaigns on that network for copying, so that they may optimize them, prior to each instance of import into, or export from, that network."

Whether Google will accept that it needs to change its ways to the extent necessary to satisfy the Commission remains to be seen. We'll find out in a matter of weeks.

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